Australia and New Zealand have committed to bind (guarantee) their tariffs on Pacific island country products at zero, providing certainty for Pacific island country exporters. Pacific island countries’ tariff commitments will extend or reinforce predictable, secure and, over time, more liberal market access for their exports to the region.

Pacific island countries will also benefit from flexible rules of origin (ROO) and product specific rules (PSR) that will allow Pacific island country producers to source inputs from a range of external as well as domestic suppliers and still qualify for duty-free entry to Australia and New Zealand. PACER Plus also simplifies procedures for verifying the origin of goods, reducing costs and delays. These reforms will boost opportunities for value adding domestically and within the region.

Under PACER Plus, Australia and New Zealand will assist Pacific island countries to upgrade their sanitary and phytosanitary (SPS) capabilities, so that they can convert access opportunities in Australian and New Zealand markets into actual trade gains.

Standards and conformance provisions in PACER Plus, in conjunction with targeted capacity building, will provide a basis for Pacific island country goods to meet international standards and for Pacific island country exporters to make the most of opportunities in regional and global markets. Modernised customs procedures under PACER Plus will help facilitate trade by reducing border costs.

Tariff elimination for Australian exports

As a development agreement, Pacific island countries’ tariff commitments under PACER Plus take into account their unique economic situation as small island developing economies and individual capacities including Least Developed Country (LDC) status, WTO membership and reliance on tariff revenues.

Coverage of Australian export value (% of Australia’s domestic exports) and implementation period

Country

Liberalisation coverage of Australian domestic exports

Implementation period from entry into force of the Agreement

Cook Islands

92.0%

3 years

Kiribati

90.4%

Entry into force. As Kiribati eliminated its ordinary customs duties in 2014, its PACER Plus tariff commitments (bindings at zero) are effective on entry into force.

Nauru

92.9%

35 years

Niue

97.3%

25 years

Samoa

85.8%

25 years

Solomon Islands

85.1%

Tariff reduction commencing after graduation from LDC status or 10 years, whichever is later and tariff elimination over up to 25 or more years

Tonga

98.6%

25 years

Tuvalu

94.5%

Tariff reduction commencing after graduation from LDC status or 10 years, whichever is later and tariff elimination over up to 25 or more years

Vanuatu

85.0%

Tariff reduction commencing after graduation from LDC status or 10 years, whichever is later and tariff elimination. over up to 25 or more years

Australian exporters can expect early reductions or secured duty free access on entry into force for key products which include:

Most-Favoured Nation (MFN) tariff treatment

PACER Plus requires a Party to extend immediately and unconditionally to other Parties treatment no less favourable than provided to non-parties (that is, to apply MFN tariff treatment). MFN tariff treatment provides a guarantee of non-discrimination where an FTA partner excludes some goods from liberalisation or has yet to complete its scheduled liberalisation and negotiates an FTA with a third country with liberalisation commitments or faster liberalisation in relation to those goods.

In practice, the PACER Plus MFN provision will mean that any improvements on goods outcomes compared with PACER Plus will flow to Australian businesses should the Pacific island countries negotiate an FTA with a developed or significant trading country from outside the region.

Pacific island countries can renegotiate their tariff commitments through provisions for compensated modification or withdrawal of tariff concessions if they experience difficulties in implementing them before or after final implementation of scheduled tariff reductions

Pacific island countries can apply a transitional safeguard if a sudden influx of imports causes or threatens serious injury when tariffs are reduced

Pacific island countries can pause their tariff reductions – or even raise tariffs temporarily – for the purpose of industry development if certain criteria are met.

Transparency

Transparency provisions on trade in goods and the broader Agreement should provide clearer information to businesses trading in the Pacific. The Trade in Goods Chapter requires each Party to:

publish all laws, regulations, judicial decisions and administrative rulings that affect trade, all international trade agreements, and any new impost, restriction or prohibition on imports

administer all such measures in a uniform, impartial and reasonable manner

exchange information with other Parties on all rates of duty, all fees and charges, and new or modified import licensing procedures

exchange and publish up-to-date information on these matters, and

establish contact points to transmit and receive requests and notifications from Parties, as well as to facilitate requests for information and for technical discussions on measures affecting trade.